Need help with Chapter 9 Multiple Choice questions

Multiple Choice 9-1 A current liability is any obligation of a business that: a. is expected to be satisfied or paid within six months. b. is expected to be satisfied or paid within two years. c. a business will not be able to pay off. d. is expected to be satisfied or paid within one year. 2. eBook Multiple Choice 9-4 Which of the following statements is true? i. A note payable can be classified as a current or long-term liability. ii. Taxes payable are never current liabilities. a. i only b. ii only c. Both i and ii d. Neither i nor ii 3. eBook Multiple Choice 9-5 A company issues a $2,000 6% note payable due in 4 months. How much interest will the company pay for this note? a. $120 b. $0 c. $30 d. $40 4. eBook Multiple Choice 9-6 When will Long-Term Debt be considered a current liability? a. Never b. In the first year of its issuance c. Always d. Whatever portion of the debt is due within one year of the balance sheet date will be considered current 5. eBook Multiple Choice 9-7 Cash flows associated with long-term liabilities are reported: a. in the operating activities section of the statement of cash flows. b. in the investing activities section of the statement of cash flows. c. in the financing activities section of the statement of cash flows. d. on the balance sheet. 6. eBook Multiple Choice 9-8 Which of the following is a financial instrument used by an entity to borrow money? a. Bond b. Check c. Cash d. Note Receivable 7. eBook Multiple Choice 9-9 Which of the following is used to determine the amount of interest a company issuing a bond must pay the investor? a. Stated Interest Rate b. Face Value c. Market Interest Rate d. Both Stated Interest Rate and Face Value are correct. 8. eBook Multiple Choice 9-10 On January 1, Doroh Enterprises issues $200,000, 10-year, 6% bonds at par value with interest payable on July 1 and January 1. The entry on July 1 to record payment of bond interest will include a: a. debit to Interest Expense, $6,000. b. debit to Interest Expense, $12,000. c. credit to Cash, $12,000. d. credit to Interest Payable, $6,000. 9. eBook Multiple Choice 9-11 Camp Corporation issues bonds with a stated interest rate of 8%. The current market rate of interest is 10%. These bonds likely sold at: a. par value. b. a discount. c. a premium. d. None of these choices are correct. 10. eBook Multiple Choice 9-12 If bonds with a face value of $400,000 are issued at 102, how much cash is received by the borrowing company? a. $402,000 b. $404,000 c. $408,000 d. $392,000 11. eBook Multiple Choice 9-13 If bonds with a face value of $100,000 are sold for $96,000, how must this $4,000 difference be accounted for? a. It must be depreciated b. It must be amortized over the life of the bond c. It must be recorded as a loss on issuance d. It must be ignored 12. eBook Multiple Choice 9-14 What does it mean when bonds are issued at a premium? a. The market interest rate exceeds the stated interest rate b. The market interest rate and the stated rate are the same c. The stated interest rate exceeds the market interest rate d. None of these choices are correct. 13. eBook Multiple Choice 9-16 If bonds with a face value of $200,000 are issued at 102, what amount is recorded in the Bonds Payable account? a. $204,000 b. $202,000 c. $196,000 d. $200,000 14. eBook Multiple Choice 9-19 An operating lease: a. allows a company to finance an asset without reporting a liability on the balance sheet. b. can be disclosed in the notes to the financial statements. c. Both a and b. d. Neither a nor b. 15. eBook Multiple Choice 9-20 Which of the following is necessary for a contingent liability to exist? a. There must be an existing condition b. The resolution of the condition must depend on some event in the future c. The outcome of the condition must be unknown d. All of these choices are correct